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Excessive partisanship and endless acrimony are common complaints lodged against the political class. There’s a lot to be said in favor of this narrative, but bipartisanship isn’t always what it’s cracked up to be, either. As evidence, consider the latest attempt to extend corporate handouts for electric vehicle (EV) manufacturers.
The Driving America Forward Act was recently introduced to extend the existing EV tax credit well beyond its current limits. Unsurprisingly, its sponsors include both Michigan Senators, Democrats Debbie Stabenow and Gary Peters, as well as Republican Senators Lamar Alexander of Tennessee and Susan Collins of Maine. A companion version was introduced in the House of Representatives by Rep. Dan Kildee, also a Democrat from a district in Michigan.
Under current law, a federal tax credit of up to $7,500 is available to consumers of the first 200,000 vehicles sold by each manufacturer, after which the credit is phased out. Both Tesla and General Motors have exceeded the cap, a fact that has driven a lobbying frenzy to extend the benefit. This wouldn’t be the first time the credit was expanded, as the original incarnation of the credit applied only to the first 250,000 electric vehicles sold across all manufacturers.
This new legislation will allow for the purchase of an additional 400,000 vehicles to be eligible for a $7,000 credit, but it might as well be permanent. If Congress passes the bill and it’s signed into law, Washington will be sending a clear signal to manufacturers that the gravy train may never end. All the EV makers must then do is flood Washington with lobbying and campaign donations once the next deadline approaches and the cycle could no doubt continue.
The current credit is expected to cost $7.5 billion in federal revenue from last year through 2022, according to the Congressional Research Service and the Joint Committee on Taxation. The costs of the newly expanded credit are not yet available but would be considerably higher.
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